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“Learning From Corporate Flops”—Rita McGrath featured in Wall Street Journal

The Business Insight section of the Wall Street Journal features an interview of Rita McGrath by MIT Sloan Management Review’s editor Martha E. Mangelsdorf on Monday, October 26th. Entitled Learning from Corporate Flops the WSJ notes that “Rita Gunther McGrath, an associate professor at Columbia Business School, has studied corporate new ventures extensively. In the process, Dr. McGrath concluded that many traditional tools for corporate planning, while useful in relatively stable markets, aren’t much help when companies are dealing with new, uncertain business initiatives.”

BUSINESS INSIGHT: You and Prof. Ian C. MacMillan of the Wharton School of the University of Pennsylvania wrote a book called “Discovery-Driven Growth.” What is discovery-driven growth?

DR. MCGRATH: Discovery-driven growth is a way of planning to grow that doesn’t require a lot of analytical information at the outset. It recognizes that many of the data that you need to make decisions don’t exist at the time that you have to make the decisions. It’s a plan to learn. I think we all live with a conceptual overhang from an industrial era when things were more predictable. You had big production runs. At least if you were an American company, you had a lot of markets with very little competition, and what competition there was was more or less predictable. In many businesses you could use the past as an adequate guide to what the future held for you. In more and more industries, those conditions no longer apply. You’re seeing temporary advantages, very rapid swings in who’s on top competitively, new technologies that make older ones irrelevant at an ever-faster clip — the usual litany of things people moan about today. But I think one of the things that has not yet quite been fully recognized is that these have an impact on our management processes — or should. To read the entire article, click here.